of relevance to fund operations
In June the we responded to the FCA consultation on the new Long-Term Asset Fund (LTAF) structure. The FCA is expected to publish its policy statement and final rules in the autumn. Of particular concern to us is ensuring that the LTAF has a broad enough potential investor base for it to be commercially successful. The IA is also working with HMT on the tax reforms needed to make it internationally competitive.
Much like the consultation last year to introduce notice periods to property funds, the IA is keen to ensure that the operational challenges presented by different product features are addressed properly. There is little prescription provided in the proposed rules on how dealing and liquidity tools for LTAF will need to operate. To avoid operational challenges due to fragmentation, we may need to consider if there is scope to develop guidelines in order to facilitate a level of standardisation of operational procedures.
In July, the Financial Policy Committee published the conclusions of the joint Bank of England-FCA review of open-ended investment funds. The review built on the previous concern that the mismatch between funds' redemption terms and the liquidity of some of their assets creates an incentive for investors to redeem ahead of others, particularly in stressed conditions.
The IA liquidity management and measurement working groups are considering the framework that has been proposed, in the context of our previous draft guidance on liquidity management and measurement. Additionally, our swing pricing working group will be updating IA guidance and agreeing industry best practice in light of the Bank's comments.
The IA published its Future World of Work publication in July. The report looks at what the future of work will be like post-pandemic and is made up of a series of thought leadership pieces, written by subject matter experts from within and outside the industry, supplemented by a number of member case studies. These prove non-prescriptive insights on three key areas:
Firms are currently preparing for the incoming operational resilience rules that come into effect at the end of March 2022. These require firms to:
Firms will need to work with their outsourced service providers to deliver these outputs. The IA has published a number of helpful guides available on the dedicated webpage.